The most dramatic events in the oil market last week occurred in North America as opposed to OPEC’s get-together in Europe, according to Goldman Sachs Group Inc.

The bank says the outage of an oilsands facility in Canada could lead to a shortage in North America for all of July and shrink stockpiles at the main U.S. storage hub in Cushing, Oklahoma. That’ll support American oil prices while a deal in Vienna between OPEC and its allies to boost output — led by Saudi Arabia — may weigh on Europe’s Brent crude, analysts including Damien Courvalin wrote in a June 24 report.

“With the global market pricing to pull crude out of the U.S., this loss of U.S. supplies will exacerbate the current global deficit, making the increase in OPEC production all the more required,” the analysts wrote in the report. “And while Saudi is already ramping up exports, these will not be delivered until August with June stock draws already accelerating.”

Saudi Energy Minister Khalid Al-Falih on Saturday signalled a real supply gain approaching 1 million barrels a day after OPEC adopted a pact aimed at lifting output on Friday. He was seeking to reassure the market after several cartel members said the actual increase will only reach 700,000 because some nations are incapable of pumping more.

Brent crude, the benchmark for more than half the world’s oil, fell as much as US$1.81 to US$73.74 a barrel on Monday after Saudi Arabia’s pledge over the weekend to boost output, following an ambiguous OPEC pact and contradictory statements from other nations on Friday.

In contrast, U.S. West Texas Intermediate crude was up 29 cents at US$68.87 a barrel on Monday. Stockpiles at Cushing have slumped for five weeks with the start of the summer driving season when demand peaks.

An outage at Syncrude Canada’s oil-sands facility may lead to a 360,000 barrel-a-day shortage for all of July, which could spur a further draw down in inventories at the U.S. hub, Goldman said. The spread between the European and American markers narrowed 18 per cent Monday and has almost halved in under a week. U.S. crude’s discount to Middle East benchmark Dubai oil shrank to the smallest since May 16.

While the bank kept its summer forecast for Brent crude unchanged at US$82.50 a barrel, it says prices will sequentially decline to US$75 by year-end. However, Goldman warned against positioning for the move lower right away, given the current market deficit and low inventories.

A recent pick up in outages from Libya to Nigeria and Canada, as well as growing risks that output in Iran — which is being targeted by the U.S. with sanctions — falls more than expected may challenge OPEC spare capacity, the bank said.

Saudi Arabia and Russia initially proposed raising output after curbs by OPEC and its allies since last year helped eliminate a global glut and boosted Brent crude to US$80 a barrel for the first time since 2014.

Even if output were increased aggressively, the group’s announcement doesn’t threaten “to create a large reversal in fundamentals,” Goldman said. Even under this scenario, which would require an unprecedented increase in core-OPEC and Russia production and would leave the market with little remaining spare capacity, the bank says it expects only a slim surplus.

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The biggest thing in oil last week wasn’t in Vienna, it was in Canada, says Goldman Sachs